Ensuring a Sustainable Health System - Fall 2013

Ensuring a Sustainable Health System for our Community

An Update from Art Nichols and Don Caruso, MD, MPH

What is the best way for our local medical center to ensure a sustainable health system for its community in this age of health care reform and economic challenges? That’s the strategic question the Cheshire Medical Center Board of Trustees members and senior leaders have been studying for the past year. Although we have taken many successful steps to reduce expenses and increase efficiencies while maintaining high-quality health care services, it is a challenge to match state and federal reimbursement reductions. In 2011 and 2012 we experienced our first operating losses in over three decades. While we returned to a modest gain from operations in 2013, the challenges presented by the Medicaid Enhancement Tax and changing reimbursements are daunting.

After several months of work, leadership from Cheshire Medical Center and Dartmouth-Hitchcock in Lebanon have agreed to formalize and proceed further with substantive discussions regarding how a closer affiliation between our two organizations could benefit our patients, employees and the residents of Southwestern New Hampshire and Southeastern Vermont.

Several strategic options for creating a sustainable health system have been studied, including consideration of many potential organizations with which to affiliate. Stroudwater Associates, a New England-based healthcare consulting firm, helped us conduct this study and we have concluded that a closer affiliation with Dartmouth-Hitchcock could be a natural next step. This would allow us to build on our successful Joint Operating Agreement, in place since 1998. We share a common vision of the future of health care with Dartmouth-Hitchcock, one that is based on creating a sustainable health system focusing on population health, delivering value-based care, and embracing the opportunities provided by new payment models.

Our shared vision for a health system that focuses on keeping people healthy and out of the hospital emphasizes the importance of our community’s Healthy Monadnock 2020 initiative (formerly Vision 2020). Community health and wellness is now a national conversation, and our commitment to Healthy Monadnock 2020 shows that it is one of our top priorities.

Over the next four months, a working group of Trustees and senior leaders from both organizations will discuss the potential benefits for our communities that a closer affiliation could provide. If discussions and negotiations are favorable, Cheshire Medical Center and Dartmouth-Hitchcock could then enter into a comprehensive agreement that would define the scope and nature of a closer affiliation. Any proposed agreement would be subject to review and approval by the New Hampshire Director of Charitable Trusts and the New Hampshire Attorney General’s Office, the receipt of any other necessary approvals, and the completion of a comprehensive due diligence investigation by both parties. We will also reach out to community members to gather input as we continue to build a sustainable health system.

As these discussions proceed and more information becomes available in the months ahead, we will keep you informed of our progress towards our goal of ensuring a sustainable health system for our patients, families and neighbors.